Yancoal hires RBC, CITIC CLSA for $US5bn Anglo American coal sale

Anglo American’s coal mines in Australia are up for sale.

Australian listed coal miner Yancoal is understood to have tapped investment banks RBC and CITIC CLSA in its quest to buy Anglo American’s Queensland-based metallurgical coal mines that may sell for up to $US5bn.

Yancoal, which is 62 per cent owned by Chinese state-owned Yankuang Energy, is expected to be a strong contender for the assets owned by the London-listed miner, which was this year targeted for a buyout by BHP. Swiss commodity trader Glencore is also expected to run hard at the opportunity.

Glencore will come to the competition self-advised, while Yancoal and Glencore will likely face scrutiny from the Foreign Investment Review Board.

Stanmore Coal is thought to be in the mix, and Indonesian backers are likely to be there to support its bid or play separately – such as BUMA Energy and Stanmore’s backer, Golden Energy – but so far, it’s Glencore that is considered the group to beat.

The process starts this month. There’s not said to be any promotional material first being distributed and Anglo American is opting to dive straight in with the provision of information memorandums in a process run by Morgan Stanley and Goldman Sachs.

Suitors have already signed up to enter a data room.

On offer are Anglo American’s Capcoal and Dawson assets, and its most attractive mines, Moranbah North and Grosvenor.

Also in the mix are its Aquila project, an interest in Jellinbah and the potential Moranbah South project.

Anglo American is one of the world’s leading metallurgical coal producers, and has five mines in Australia.

Analysts had earlier estimated they contributed $US3.3bn to Anglo’s overall value, but there had been suggestions they could be sold for about $US5bn.

However, this was before a fire broke out at the Grosvenor mine causing its closure.

The fire at the mine at Moranbah, about 1000km northwest of Brisbane, was caused by a gas ignition incident in June.

For 2023, Anglo American’s steelmaking coal operations generated 15 million tonnes of coal, equating to $1.3bn of earnings before interest, tax, depreciation and amortisation.

It is targeting the production of about 20 million tonnes per annum at a unit cost of about $US100 a tonne by 2026.

Mining giant Anglo American announced a company break-up while fending off BHP’s advances, leading to some of the best coal mines in the world – which sat within its portfolio – being put on the market.

BHP is not believed to be bidding.